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Big Data Darlings

As data shapes the world around us, firms that successfully manage that data will profit.

It's not just the usual suspects, IBM, Oracle, and Teradata that are mining profits with data. As businesses and consumers create byte after byte of data, other firms are shaping the way that data is created, consumed and archived. Datawatch(NASDAQ:DWCH), Tableau Software(NYSE:DATA), and Splunk(NASDAQ:SPLK) are the new breed in the data sub-sector. These firms will become more profitable as data continues to drive companies and consumers lives.

Datawatch's bold movesDatawatch is a leading provider of visual-data discovery solutions. The company has focused on strengthening its strategic partnerships in order to gain clients and expertise. Datawatch and Lavastorm Analytics announced an alliance to provide customers the ability to expand their use of unstructured and semi-structured data sources when developing analytic applications, while providing better real-time tracking functionality.

Datawatch has also partnered with Semantic Visions. Semantic Visions will embed Datawatch's visualization software in Semantic's Vega product. Datawatch's software will help the Vega application provide much needed visualization while "reading" 1 million articles from over 150 news sources, in 11 languages.

Datawatch has even partnered with IBM to provide integrated content management solutions for IBM's Content Manager OnDemand (CMOD). Customers will use the Datawatch Report Mining Server in conjunction with IBM's CMOD to analyze big data for business insights.

Datawatch recently rebranded its entire software suite in a deliberate effort to solidify the brand while improving quality. The integrated Datawatch product line includes Datawatch Desktop, Server, Modeler, Report Mining Server, Report Manager On-Demand, and Automator. These proprietary best-of-breed tools will continue to meet the needs of Datawatch's 40,000 customers as they examine and understand their business data -- in real-time -- using visual integrated software.

Tableau's fantastic 2013This year has been a fabulous year for Tableau Software. The firm's IPO closed up over 60% in its first day of trading. Tableau now has a market cap of $3.5 billion and growing. Revenue was up 90% from 2012's fourth quarter. They held a successful customer conference attended by over 3000 customers and partners. The firm added over 1500 new clients and partnered with Google to provide data visualization services for the Gartner IT Symposium.

This summer Tableau released a new cloud-based service that provides business intelligence and analytics in an easy-to-use package. Tableau Online has hundreds of users representing companies such as Elite Bands and the hedge fund Herring Creek Capital. These companies crave fast analytics, shared data, and security -- Tableau's product delivers.

Many businesses are using Splunk's latest flagship product. PostFinance, the financial services unit of Swiss Post, uses Splunk Enterprise 6 to use data to deliver a great online user experience. The easy-to-use interface and visual business data allows PostFinance to use real-time metrics to constantly improve online operations and customer service.

Splunk Enterprise 6 is being used to thwart hacking. Oak Ridge National Laboratory security use Splunk Enterprise 6 to analyze large chunks of data in real-time. Manipulating and interacting with data allows security analysts to recognize and stop cyber threats by discovering suspicious patterns using visualization.

Splunk has been aggressively adding value with M&A. They recently acquired BugSense, a platform for analyzing mobile data. With this M&A Splunk added Skype, Soundcloud, Box, Trulia and Yahoo as customers -- not bad. Splunk is one of the bigger ($6.6 billion) market cap data firms, and with zero debt. This stock is worth a look from both growth and value investors.

Foolish final thoughtsSplunk is up 115% year to date, Datawatch is up 138%, and Tableau is the laggard -- up "only" 17%. Collectively, these firms employ fewer than 2000 employees. All three of these firms make good use of open source technology, allowing them to maintain profits while remaining on the cutting edge. By using open source tools these firms don't have to pay for proprietary software, tools and support -- they get to keep their profits to themselves. These firms are really efficient growth engines, they just add value -- one byte at a time.